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TT 1040 tax calculation appears to be wrong

My client has a sub s that had a 2020 business loss. He has NO basis in the sub s. In addition to the loss the applicable k-1 included tax-exempt income (COVID-19 assistance), nondeductible expenses and distributions. The software is allowing a 2020 loss based on the tax-exempt income. Moreover, the allowed loss includes a portion of the nondeductible expenses!


What am I and/or the software doing wrong? 

4 Replies
Level 15
Level 15

TT 1040 tax calculation appears to be wrong

You cannot use TurboTax to prepare returns for clients. TurboTax is only for consumer use and cannot be used by paid preparers. Intuit (the company that makes TurboTax) has three tax software product lines for professional preparers: ProSeries, Lacerte, and ProConnect. You can find information about all three product lines at the following link.

Intuit Professional Tax Software


TT 1040 tax calculation appears to be wrong

Not sure about the software doing anything wrong BUT you may have to choose that your client is not at risk.

TT 1040 tax calculation appears to be wrong

The PPP LOAN  is NOT income of any kind and should not be entered as such on the 1120-S so that is your first mistake.   Please seek local professional assistance,  or do some research on this subject ,  or  use a professional program if you are a paid tax pro where you can ask questions from that program's help desk.  

TT 1040 tax calculation appears to be wrong

Section 276 also provides S corporation and partnership PPP borrowers instructions for the tax treatment of the amount excluded from gross income due to PPP loan forgiveness. Under Section 276, S corporations and partnerships treat the exclusion from gross income as tax-exempt income, and shareholders and partners increase their tax basis in the S corporation or partnership based on their share of the tax-exempt income.


Excerpt from AICPA Journal of Accountancy

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